Summary
NextEra Energy, Inc. (NEE) reported a strong third quarter and nine-month performance ending September 30, 2018, with net income attributable to NEE significantly increasing year-over-year, driven by the performance of its main subsidiaries, Florida Power & Light (FPL) and NextEra Energy Resources (NEER). FPL demonstrated robust growth, largely due to continued investments in its rate base, leading to an increased regulatory Return on Equity (ROE). NEER's results, while showing some quarter-over-quarter fluctuation due to derivative impacts and the deconsolidation of NEP, delivered substantial year-to-date growth primarily from a significant one-time gain related to the deconsolidation of NEP and favorable tax reform impacts. The company's strategic focus on infrastructure investment and renewable energy development continues to drive financial results.
Financial Highlights
44 data pointsBeta
Financial Statements
Beta
| Revenue | $4.40B |
| Operating Expenses | $3.45B |
| Operating Income | $968.00M |
| Net Income | $1.00B |
| EPS (Basic) | $0.53 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Basic) | 1.89B |
| Shares Outstanding (Diluted) | 1.91B |
Key Highlights
- 1Net income attributable to NEE increased by $160 million to $1,007 million ($2.10 per diluted share) for the third quarter of 2018, and by $3,006 million to $6,229 million ($13.03 per diluted share) for the nine months ended September 30, 2018, compared to the prior year periods.
- 2FPL's net income increased in both the third quarter and year-to-date periods, driven by ongoing investments in its rate base, which supported a higher regulatory ROE.
- 3NEER's nine-month results saw a significant increase primarily due to a substantial gain from the deconsolidation of NEP ($3.9 billion pre-tax) and favorable tax reform impacts, largely offsetting increased losses from non-qualifying hedge activities in the third quarter.
- 4Capital expenditures remain substantial, with NEE investing $9.26 billion in the first nine months of 2018, focused on FPL's generation, transmission, and distribution infrastructure, and NEER's renewable energy projects (wind, solar, gas pipelines).
- 5The company completed the acquisition of Florida City Gas (FCG) in July 2018 and continues to pursue the acquisition of Gulf Power and two natural gas generation facilities, subject to regulatory approvals.
- 6NEE ended the period with approximately $8.4 billion in net available liquidity, demonstrating strong financial flexibility to support ongoing operations and growth initiatives.
- 7The company announced a plan to cease operations of the Duane Arnold nuclear facility after the expiration of its amended power purchase agreement in December 2020, subject to regulatory approval.
Frequently Asked Questions
The primary driver of the significant increase in NEE's net income for the nine months ended September 30, 2018, was a substantial gain of approximately $3.9 billion ($3.0 billion after tax) recognized from the deconsolidation of NEP (NextEra Energy Partners). This gain, combined with favorable tax reform impacts and strong performance from FPL, contributed to the substantial year-over-year increase.
NEE completed the acquisition of FCG in July 2018, which is now part of FPL. While the full impact of the Gulf Power and natural gas generation facilities acquisitions will be reflected in future periods upon closing (expected in early 2019), the integration of FCG contributes to FPL's overall performance. These strategic acquisitions align with NEE's growth strategy in regulated utility and competitive energy businesses.
The Tax Cuts and Jobs Act of 2017 reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This resulted in a revaluation of deferred income taxes, reducing NEE's net deferred income tax liabilities. For NEER, this led to an increase in net income. For FPL, the reduction was recorded as a regulatory liability, expected to be passed on to customers. The company also recorded an income tax charge related to an adjustment of differential membership interests due to the change in federal income tax rates.
NEE utilizes derivative instruments, including swaps, options, futures, and forwards, to manage risks associated with fluctuating commodity prices (fuel and electricity) and interest rates. For NEER, derivatives are also used to optimize asset values and for marketing and trading activities. For FPL, changes in derivative fair values are largely deferred as regulatory assets/liabilities and passed through to customers via the fuel clause. NEE and FPL also manage interest rate risk through a mix of fixed and variable rate debt and interest rate contracts.